Capital Gains Tax Advice.

[Quattromaster]

Afternoon folks, Happy New Year to all.

Who would I need to speak to regarding finding out how much CGT there would be to pay on selling a property, I presumed accountant, financial advisor or solicitor, yet on speaking to then they all pass the Buck.

My mother lives in Spain, has a 2 bed flat, in her name, in the UK, that she rents out, she has never lived in it, is the only property she owns, paid 20k about 25 yrs ago, now worth roughly 260k.

Her mother lived in it until approx 10 yrs ago, since then been rented pretty much all the time. However been empty since early Sept, after last tenant left, needed a 5k tidy up, lick of paint and carpets.

She was going to rent it back out, however is not thinking of selling, and buying something else to rent out that’s nearer myself, this flat is almost 2 hrs drive away.

But we can’t find out how much CGT there will be to pay if she goes down this route.

Any suggestions.

[anonymous-user]

They probably pass the buck as she lives in Spain - it is more complicated to calculate and deal with

Start here

https://www.gov.uk/guidance/capital-gains-tax-for-...

That links to this page with a calculator

https://www.gov.uk/guidance/capital-gains-tax-for-...

[anonymous-user]

Quattromaster said:

I presumed accountant, financial advisor or solicitor, yet on speaking to then they all pass the Buck.

By which you mean, presumably, they tell you they can't invent the calculation out of thin air. You need to provide them with information about purchase price, expenses of sale/purchase, any capital improvements etc. For instance, Stamp Duty (if any) and solicitors costs paid when it was purchased are allowed against tax. As are estate agent and solicitor on sale.

Then the rate of tax payable will depend upon the owner's overall tax position in UK. CGT rate depends on the owner's situation across the tax bands. For instance, if the owner is receiving UK state pension that forms part of their relevant income for the calculations whether or not there's any income tax payable on it.

Professional advisors can only take instructions from their "client". The client must presumably be the property owner or someone acting under a formal power of attorney on behalf of the owner.

[ellroy]

An accountant would be able to do the calculation for you/her, assuming you can provide the information required, but I suspect the question is more about where her tax residence is.

That could have some impact as to what/who needs paying & hence the amount of tax due. If you can give clarity around that then you should know if it’s a Spanish issue or U.K.

[Cheib]

In the last three years I have had to take advice on CGT. Regular accountant deferred to a specialist in one case and on another my IFA who I would describe as sophisticated has deferred to a specialist lawyer who I have also used for my Will/IHT planning. It can get quite complicated.

You really need to start by confirming where your mother is resident for tax purposes.

One thing that is almost certain (if your mother pays UK tax) is that whatever advice you get will be out of date unless you sell the property very quickly as CGT is set to be revised (upwards) in the next Budget.

[Quattromaster]

Thanks for help and pointers so far.

Mum is a Spanish resident, and pays tax in both Spain and the UK. The UK part being on her pension and rental income.

I do have power of attorney over all Mums affairs, deal regularly with her UK accountant.

[Cheib]

Quattromaster said:

Thanks for help and pointers so far.

Mum is a Spanish resident, and pays tax in both Spain and the UK. The UK part being on her pension and rental income.

I do have power of attorney over all Mums affairs, deal regularly with her UK accountant.

If she is a Spanish resident I think she has to pay CGT in Spain which will be covered by the tax treaty between the two countries so she won’t have to pay CGT in Spain and the UK.

This seems like a good place to start

https://www.blevinsfranks.com/news/blevinsfranks/a...

[Eric Mc]

Quattromaster said:

Thanks for help and pointers so far.

Mum is a Spanish resident, and pays tax in both Spain and the UK. The UK part being on her pension and rental income.

I do have power of attorney over all Mums affairs, deal regularly with her UK accountant.

Per HMRC website -

"You have to pay tax on gains you make on property and land in the UK even if you're non-resident for tax purposes. You do not pay Capital Gains Tax on other UK assets, for example shares in UK companies, unless you return to the UK within 5 years of leaving".


There are also now, VERY tight time limits for declaring and paying Capital Gains Tax on the sale of residential property. In effect, you only have 30 days from Completion - so not much time to get everything done. It all has to be done on-line as well so there is registration process involved before you can make the submission.

[Eric Mc]

Cheib said:

If she is a Spanish resident I think she has to pay CGT in Spain which will be covered by the tax treaty between the two countries so she won’t have to pay CGT in Spain and the UK.

This seems like a good place to start

https://www.blevinsfranks.com/news/blevinsfranks/a...

See my post above - the CGT rules on the sale of residential property are different to the CGT rules on other types of assets (stocks and shares, commercial properties etc)

[Cheib]

Eric Mc said:

Cheib said:

If she is a Spanish resident I think she has to pay CGT in Spain which will be covered by the tax treaty between the two countries so she won’t have to pay CGT in Spain and the UK.

This seems like a good place to start

https://www.blevinsfranks.com/news/blevinsfranks/a...

See my post above - the CGT rules on the sale of residential property are different to the CGT rules on other types of assets (stocks and shares, commercial properties etc)

So you pay CGT on a UK property to HMRC regardless of residence. What is the position of the OP’s mother given she is resident in Spain ? Does she have to pay CGT there too ?

[Eric Mc]

She needs specialist advice - which I won't be giving here as it is not an area I'm a specialist in.

It's a complex area.

A number of years ago the UK Government decided that non UK tax residents who owned land and property in the UK had to pay UK CGT - mainly because of the behaviour of Russian Oligarchs and Asians who were buying up large chunks of London and not paying any tax in the UK.